American Resources Corp 8-K, filed Jul 24, 2020

American Resources Corp (AREC)

8-K 2020-07-24 For: 2020-07-24

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Added on April 06, 2026

About this 8-K

American Resources Corp filed this 8-K on July 24, 2020.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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Exhibit No.		Description
99.1		Earnings Release Dated July 24, 2020

	American Resources Corporation

Date: July 24, 2020	By:	/s/ Mark C. Jensen
		Mark C. Jensen
		Chief Executive Officer

	Three month ended		Three month ended
	June 30,	March 31,	June 30,
	2020	2020	2019
Sales Volume (a)
Tons Sold	-	6,568	127,021

Company Production (a)
McCoy Elkhorn Coal	-	-	56,335
Perry County Resources	-	6,568	-
Deane Mining	-	-	70,686
Total	-	6,568	127,021

Company Financial Metrics(b)
Revenue per Ton	-	79.83	73.38
Cash Cost per Ton Sold (c)	-	282.46	49.27
Cash Margin per Ton (c)	-	(202.63)	24.11

Development Costs	$307,247	$128,159	1,887,447


Notes:
(a) In short tons
(b) Excludes transportation
(c) Cash cost per ton is based on reported cost of sales and includes items such as production taxes, royalties, labor, fuel, and other similar production and sales cost items, and may be adjusted for other items that, pursuant to GAAP, are classified in the Statement of Operations as costs other than cost of sales, but relate directly to the cost incurred to produce coal. Our cash cost of sales per short ton is calculated as cash cost of sales divided by short tons sold, and our cash margin per ton is calculated by subtracting cash cost per ton from revenue per ton. Cash cost of sales per short ton and average cash margin per ton are non-GAAP financial measure which are calculated in conformity with U.S. GAAP and should be considered supplemental to, and not as a substitute or superior to financial measures calculated in conformity with GAAP. We believe cash cost of sales per ton and average cash margin per ton are useful measurse of performance as it aides some investors and analysts in comparing us against other companies. Cash cost of sales per ton and margin per ton may not be comparable to similarly titled measures used by other companies.

	For the three months ended June 30, 2020	For the three months ended June 30, 2019	For the six months ended June 30, 2020	For the six months ended June 30, 2019

Coal Sales	$-	$9,321,250	$524,334	$16,315,526
Metal Aggregating, Processing and Sales	226,836	-	226,836	-
Processing Services Income	-	20,876	-	20,876

Total Revenue	226,836	9,342,126	751,170	16,336,402

Cost of Coal Sales and Processing	(662,556)	(5,654,568)	(2,517,743)	(12,298,655)
Accretion Expense	(370,587)	(320,098)	(741,174)	(641,799)
Depreciation	(293,746)	(804,889)	(1,208,798)	(1,621,805)
Amortization of Mining Rights	(313,224)	(802,590)	(626,448)	(1,339,381)
General and Administrative	(684,307)	(990,918)	(1,527,231)	(2,363,506)
Professional Fees	(316,280)	(631,934)	(510,326)	(4,965,830)
Production Taxes and Royalties	(89,827)	(603,957)	(250,057)	(1,863,543)
Development Costs	(307,247)	(2,887,448)	(435,406)	(4,487,565)

Total Operating Expenses	(3,037,774)	(12,696,402)	(7,817,183)	(29,582,084)

Net Loss from Operations	(2,810,938)	(3,354,276)	(7,066,013)	(13,245,182)

Other Income and (expense)
Other Income	(1,726,184)	214,529	(314,179)	480,954
Gain on Sale of Assets	6,820,949	-	6,820,949	-
Loss on settlement of payable	-	-	-	(22,660)
Amortization of debt discount and issuance costs	(5,758)	(2,869,118)	(5,758)	(7,502,979)
Interest Income	41,171	41,172	123,514	82,343
Warrant Modification Expense	-	(2,545,360)	-	(2,545,360)
Interest expense	(1,011,003)	(447,989)	(1,511,643)	(772,843)
Total Other income (expense)	4,119,175	(5,606,766)	5,112,883	(10,280,545)

Net Income (Loss)	$1,308,237	$(8,961,042)	$(1,953,130)	$(23,526,227)

Net loss per common share - basic and diluted	$.05	$(0.38)	$(.07)	$(1.07)

Weighted average common shares outstanding	26,833,809	23,345,857	27,122,160	22,078,999

	June 30, 2020	December 31, 2019
ASSETS

CURRENT ASSETS
Cash	$1,618,582	$3,324
Accounts Receivable	37,400	2,424,905
Inventory	150,504	515,630
Prepaid fees	175,000	-
Accounts Receivable - Other	234,240	234,240
Total Current Assets	2,215,726	3,178,099

OTHER ASSETS
Cash - restricted	535,641	265,487
Processing and rail facility	12,554,715	12,723,163
Underground equipment	7,850,626	8,294,188
Surface equipment	3,136,906	3,224,896
Acquired mining rights	669,860	669,860
Coal refuse storage	12,171,271	12,171,271
Less Accumulated Depreciation	(12,715,725)	(11,162,622)
Land	1,748,169	1,748,169
Note Receivable	4,117,139	4,117,139
Total Other Assets	30,068,602	32,051,551

TOTAL ASSETS	$32,284,328	$35,229,650

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES
Accounts payable	$11,456,102	$11,044,479
Accounts payable – related party	885,029	718,156
Accrued interest	1,197,050	2,869,763
Due to affiliate	74,000	132,000
Current portion of long term-debt (net of unamortized discount of $- and $134,296)	16,601,920	20,494,589
Current portion of convertible debt, (net of unamortized discount of $- and $-)	-	7,419,612
Current portion of reclamation liability	2,327,169	2,327,169
Total Current Liabilities	32,541,270	45,006,407

OTHER LIABILITIES
Long-term portion of note payable (net of issuance costs of $422,941 and $428,699)	4,731,760	5,415,271
Convertible note payables – long term	14,517,371	-
Reclamation liability	14,981,814	17,512,613
Total Other Liabilities	34,230,945	22,927,884

Total Liabilities	66,772,215	67,934,291

STOCKHOLDERS’ EQUITY (DEFICIT)
AREC - Class A Common stock: $.0001 par value; 230,000,000 shares authorized, 26,040,512 and 27,410,512 shares issued and outstanding	2,603	2,740
AREC - Series A Preferred stock: $.0001 par value; 5,000,000 shares authorized, 0 and 0 shares issued and outstanding	-	-
AREC - Series C Preferred stock: $.0001 par value; 20,000,000 shares authorized, 0 and 0 shares issued and outstanding	-	-
Additional paid-in capital	90,611,151	90,326,104
Accumulated deficit	(125,101,641)	(123,033,485)
Total Stockholders’ Equity (Deficit)	(34,487,887)	(32,704,641)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$32,284,328	$35,229,650

AMERICAN RESOURCES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED

	For the six months ended	For the six months ended
	June 30, 2020	June 30, 2019
Cash Flows from Operating activities:
Net loss	$(1,953,130)	$(23,526,227)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,208,798	1,621,805
Amortization of mining rights	626,448	1,339,381
Accretion expense	741,174	641,799
Liabilities reduced due to sale of assets	(3,271,973)	-
Recovery of previously impaired accounts receivable	-	(50,806)
Amortization of issuance costs and debt discount	-	7,502,979
Warrant modification expense	-	2,545,360
Stock option expense	142,296	142,296
Issuance of warrants in connection with convertible notes	1,223,700	-
Issuance of shares for services	18,800	-
Issuance of shares for debt settlement	642,060	-
Warrant expense	87,754	2,524,500
Shares returned as part of asset sale	(1,840,200)	-
Share compensation expense	-	1,806,040
Change in current assets and liabilities:

Accounts receivable	2,387,505	(597,015)
Inventory	365,126	42,774
Prepaid expenses and other assets	(175,000)	(335,174)
Accounts payable	296,597	(1,679,980)
Funds held for others	-	(59,707)
Accrued interest	(1,672,713)	579,486
Accounts payable - related party	108,234	123,002
Cash used in operating activities	(1,064,524)	(7,379,486)

Cash Flows from Investing activities:

Cash received (paid) for PPE, net	417,857	(735,495)
Cash provided by (used in) investing activities	417,857	(735,495)

Cash Flows from Financing activities:

Principal payments on long term debt	(72,255)	(2,314,680)
Proceeds from convertible debt	1,751,477	-
Proceeds from the sale of common stock, net	10,500	4,354,000
Proceeds from long term debt	2,649,800	4,299,980
Net proceeds from (payments to) factoring agreement	(1,807,443)	565,657
Cash provided by financing activities	2,532,079	6,904,957

Increase(decrease) in cash and restricted cash	1,885,412	(1,210,024)

Cash and restricted cash, beginning of period	268,811	2,704,799

Cash and restricted cash, end of period	$2,154,223	$1,494,775

Supplemental Information
Non-cash investing and financing activities
Assumption of net assets and liabilities for asset acquisitions	$-	$2,500,000
Common shares issued in asset acquisition	$-	$24,400,000
Conversion of accounts payable to common stock	$-	$231,661
Issuance of common shares with note payable	$-	$87,250
Conversion of Series A Preferred into common stock	$-	$161
Conversion of Series B Preferred into common stock	$-	$1
Warrant exercise for common shares	$-	$60
Discount on note due to beneficial conversion feature	$-	$7,362,925
Cancellation of common shares	$-	$11

Cash paid for interest	$208,154	$281,832
Cash paid for income taxes	$-	$-

	For the three months ended June 30, 2020	For the three months ended June 30, 2019
Net Income	1,308,237	(8,961,042)

Interest & Other Expenses	1,011,003	5,606,766
Income Tax Expense	-	-
Accretion Expense	370,587	320,098
Depreciation	293,746	804,889
Amortization of Mining Rights	313,224	802,590
Amortization of Dedt Discount & Issuance	5,758	-
Non-Cash Stock Options	142,296	73,602
Non-Cash Warrant Expense	1,108,675	-
Non-Cash Share Comp. Expense	748,614	273,340
Development Costs	307,247	2,887,448
PCR Restructuring Expenses	113,889	-

Total Adjustments	4,415,039	10,768,733

Adjusted EBITDA	5,723,276	1,807,691